Insignia Consultants | Copper's early-year rally leaves investors unimpressed
Copper's early-year rally leaves investors unimpressed
LONDON, Jan 14 (Reuters) - Doctor Copper has started 2025 with a spring in his step after a year when the early bull party was followed by a prolonged hangover.
The London Metal Exchange three-month price has risen every day in January and is now up 4.0% from the start of the month, making copper the early outperformer of the LME base metals pack.
Market optics have turned more bullish. Exchange copper stocks fell from 600,000 metric tons at the end of August to 430,000 tons at the close of December led by a steep decline in Shanghai Futures Exchange (ShFE) inventory.
Dwindling stocks and China's rising import appetite have rekindled optimism that the country is finally turning an economic corner.
Fund managers are unconvinced, with investors' long positions only marginally ahead of bearish bets on both the CME and LME copper contracts.
The caution is down to the troubling prospect of tariffs and an escalating trade war after U.S. President-elect Donald Trump takes office next week. CME's widening premium to London suggests the copper market is taking the prospect seriously.
